India - Income Tax Act 2010 - Saarc

1.529 CH. X - SPECIAL PROVISIONS RELATING TO AVOIDANCE OF TAX S. 92(iii) the expression “rate of tax of the said country” means income-tax andsuper-tax actually paid in the said country in accordance with thecorresponding laws in force in the said country after deduction of allrelief due, but before deduction of any relief due in the said countryin respect of double taxation, divided by the whole amount of theincome as assessed in the said country;(iv) the expression “income-tax” in relation to any country includes anyexcess profits tax or business profits tax charged on the profits by theGovernment of any part of that country or a local authority in thatcountry.CHAPTER XSPECIAL PROVISIONS RELATING TO AVOIDANCE OF TAX21[ 22 [Computation of income from international transaction having regard toarm’s length price.92. (1) Any income arising from an international transaction shall be computedhaving regard to the arm’s length price.Explanation.—For the removal of doubts, it is hereby clarified that the allowancefor any expense or interest arising from an international transaction shall also bedetermined having regard to the arm’s length price.(2) Where in an international transaction, two or more associated enterprisesenter into a mutual agreement or arrangement for the allocation or apportionmentof, or any contribution to, any cost or expense incurred or to be incurredin connection with a benefit, service or facility provided or to be provided to anyone or more of such enterprises, the cost or expense allocated or apportioned to,or, as the case may be, contributed by, any such enterprise shall be determinedhaving regard to the arm’s length price of such benefit, service or facility, as thecase may be.(3) The provisions of this section shall not apply in a case where the computationof income under sub-section (1) or the determination of the allowance for any21. Sections 92 to 92F substituted for section 92 by the Finance Act, 2001, w.e.f. 1-4-2002. Seealso Circular No. 12/2001, dated 23-8-2001, Instruction No. 3, dated 20-5-2003 andInstruction No. 8/2003, dated 11-8-2003. For details, see Taxmann’s Master Guide toIncome-tax Act.22. Substituted by the Finance Act, 2002, w.e.f. 1-4-2002. Prior to its substitution, section 92,as substituted by the Finance Act, 2001, w.e.f. 1-4-2002, read as under :“92. Computation of income from international transaction having regard to arm’s lengthprice.—(1) Any income arising from an international transaction shall be computed havingregard to the arm’s length price.(2) In computing income under sub-section (1), the allowance for any expense or interestshall also be determined having regard to the arm’s length price.(3) Where in an international transaction, two or more associated enterprises enter intoa mutual agreement or arrangement for the allocation or apportionment of, or anycontribution to, any cost or expense incurred or to be incurred in connection with abenefit, service or facility provided or to be provided to any one or more of suchenterprises, the cost or expense allocated or apportioned to, or, as the case may be,contributed by, any such enterprise shall be determined having regard to the arm’s lengthprice of such benefit, service or facility, as the case may be.”